The Supreme Court unanimously ruled on June 8 against a dog toy maker whose chew toy parodies a bottle of Jack Daniel’s whiskey that the Tennessee distiller had claimed violated its trademark.
The case dealt with the intersection of the First Amendment and trademark protection laws and the extent to which one company may parody another’s product with its own product. The issue was whether the U.S. Constitution’s free speech protections insulated the parody product from trademark infringement claims by the maker of the product that is being satirized.
Corporate America is concerned about trademark protection. Several major companies filed briefs supporting Jack Daniel’s. On the other side, free speech advocates filed briefs stressing the importance of allowing people to make fun of popular brands.
The case concerns the Lanham Act of 1946, a federal law that regulates trademarks and unfair competition. The statute forbids using a trademark in a way that is “likely to cause confusion … as to the origin, sponsorship, or approval of … goods.”
The Supreme Court heard oral arguments in the case, Jack Daniel’s Properties Inc. v. VIP Products LLC (court file 22-148) on March 22.
The novelties company VIP Products sells a squeaking dog toy labeled “Bad Spaniels” that is in the shape of a Jack Daniel’s whiskey bottle, complete with a black-and-white label over what is supposed to represent brownish liquor.
The real whiskey bottle label says the product is the “Old No. 7 brand” of “Tennessee Sour Mash Whiskey,” while the toy employs scatological humor, bearing a label that says “The Old No. 2 on Your Tennessee Carpet.”
The real whiskey notes that it is 40 percent alcohol by volume, but the toy announces that it’s “43% Poo By Vol.” and “100% Smelly.” The toy also displays a small-font disclaimer saying, “This product is not affiliated with Jack Daniel’s Distillery.”
A U.S. district court found that VIP’s alleged First Amendment-protected interest in using Jack Daniel’s trademarks on the humorous canine product did not give it protection from infringement claims. But the U.S. Court of Appeals for the 9th Circuit reversed that ruling, finding VIP’s use of the trademark as parody rendered it “noncommercial” and therefore exempt from trademark dilution claims. Trademark dilution is when a third party uses a trademark in a way that lessens its uniqueness.
Jack Daniel’s attorney Lisa Blatt said during oral arguments that her client was not happy that the toy resembles the company’s product and “associates its whiskey with dog poop.”
“Trademarks are ancient property rights that necessarily restrict speech to protect investment in goodwill and prevent consumer confusion, and parodies can be confusing,” Blatt said at the time.
VIP’s attorney, Bennett E. Cooper, argued his client was entitled to make a parody product.
“In our popular culture, iconic brands are another kind of celebrity,” he told the Supreme Court.
“People are constitutionally entitled to talk about celebrities and, yes, even make fun of them. Jack Daniel’s advertised in its self-serious way that ‘Jack’ is everyone’s friend, and Bad Spaniels is a parody playful in comparing Jack to man’s other best friend.”
But the Supreme Court disagreed with Cooper in its new ruling, remanding the case to the 9th Circuit “for further proceedings consistent with this opinion.”
The distiller argued that “Bad Spaniels had infringed” its trademark “by leading consumers to think that Jack Daniel’s had created, or was otherwise responsible for, the dog toy. And Bad Spaniels had diluted the marks, the argument went on, by associating the famed whiskey with, well, dog excrement,” the justice wrote.
The 9th Circuit “never got” to the issue of whether the federal trademark statute “makes infringement turn on the likelihood of consumer confusion.” That court also “negated Congress’s judgment about when—and when not—parody (and criticism and commentary) is excluded from dilution liability.”
That appeals court held that the First Amendment “compels a stringent threshold test when an infringement suit challenges a so-called expressive work … [a]nd that test knocked out Jack Daniel’s claim, whatever the likelihood of confusion.”
“Likewise, Jack’s [sic] dilution claim failed—though on that issue the problem was statutory. The trademark law provides that the ‘noncommercial’ use of a mark cannot count as dilution. … The Bad Spaniels marks, the court held, fell within that exemption because the toy communicated a message—a kind of parody—about Jack Daniel’s.”
“Today, we reject both conclusions,” Kagan wrote.
“The dilution issue is more simply addressed. The use of a mark does not count as noncommercial just because it parodies, or otherwise comments on, another’s products,” the justice added.
It is unclear to what extent the new ruling will affect other trademark disputes.
Kagan noted that “today’s opinion is narrow.”
Justices Sonia Sotomayor and Neil Gorsuch wrote separate concurring opinions.
